It has been reported that Cuba's financial regulation is leading to an increase in crypto adoption in the country.
“Individuals who knew about cryptocurrency are nonetheless utilizing it,” Fusyona founder Adrian Leon said. Fusyona is among the earliest exchanges to provide cryptocurrency to Cubans.
In 2019, the Cuban government opened several “MLC shops” in many parts of the country. These shops sell various goods but only accept foreign currencies—paid using a special MLC card—while all items sold in the shops are marked in U.S. dollars.
However, the government forbids its citizens to trade their Cuban pesos with foreign money. Because of this, people go abroad to purchase their needs. Some Cubans eventually decided to leave the country entirely and sent what they earned back home. To make sure that their funds do not go through the authorities, these people opt to use cryptocurrencies. Moreover, earlier in 2020, Trump's administration banned Western Union from processing transactions from the U.S. to Cuba.
“Switch of worth is the primary focus given to cryptocurrency in Cuba at the moment, which is its inherent nature,” said Erich Garcia Cruz of BitRemesas and QvaPAy.
Cruz said that in addition to making their way around the regulation, Cubans also bought cryptocurrencies to “hustle.” Mario Mazzola of Qbita also said that “holding” cryptocurrencies had become more popular among Cubans. Cuban investors will exchange their cash for crypto coins and wait for the price to go up before eventually selling their crypto assets.
In May this year, the estimated number of mobile internet users in Cuba was 5,000,000. Of those users, the number of crypto consumers was between 100,000 to 200,000.
Cruz said cryptocurrency also benefited corporations in Cuba.
“I like folks to additionally uncover the entire potential crypto has to arrange digital shops, to purchase or promote providers on-line or merchandise in and outdoors of Cuba for Cubans,” he said.
Barriers to crypto adoption in Cuba
There are barriers to crypto adoption in Cuba. Local crypto experts believe that the lack of knowledge in the industry causes issues such as scamming.
“The fact is a lot of folks have been scammed, however it performed an important position in educating folks concerning the topic,” Mazzola said.
“Possibly folks dipped their toes on this world for the incorrect purpose, with the concept of magically making hundreds of thousands, however they discovered quite a lot of helpful issues about expertise, about the way it works and how you can handle a digital pockets.”
Cuba also adopted Web technology only in 2018. Because of that, it becomes more challenging to learn about the crypto industry. Mazzola said that a person must be “extremely motivated” to learn about the crypto market to start the “journey.”
However, Cruz said that investors did not need to understand every mechanism involved in the crypto market. He said, looking at platforms like Moon Pockets that accommodate instant BTC transactions, users could still utilize tools despite not knowing precisely how they worked.
Cubans also still prefer the U.S. dollar over cryptocurrencies. Cruz explained that they did this out of concern for cost volatility.